Bishop accused of diverting millions

P14-M cover up

In contrast to his iron-grip policy on financial transparency, the bishop was however quick to pardon erring clergymen who had misappropriated Church funds.

A case in point was Fr. Bayani Valenzuela, who was formerly director of the St. Andrew’s School. There was also an attempt to cover up the anomaly, but the stench could not be covered.

In 1998, Valenzuela invested school funds amounting to P14-M in Prime Bank, without securing permission from the school board. He got away with the act by forging a supposed resolution issued by the board, one priest knowledgeable about the case, said.

In June 1999, however, the bank declared a bank holiday and was later put under the receivership of the Bangko Sentral ng Pilipinas.

This put the school’s investment in jeopardy.

The mishandling of the school fund was kept secret for 6 years, until finally, Valenzuela was replaced by Monsignor Manny Gabriel.

Gabriel found out the blunder during an internal audit when he assumed office in 2004.

In an interview, Monsignor Gabriel said he uncovered more financial anomalies committed by Valenzuela and has asked the bishop to go after the erring priest by filing charges.

Instead of punishing Valenzuela however, Mercado simply terminated him as school director and barred him from having any assignments within the diocese.

Valenzuela’s case was kept hush-hush from the clergy and the laity until October 2011 when the  board of trustees of St. Andrew’s School, which is headed by Mercado, resolved to put closure to Valenzuela’s case through a resolution.

In the resolution, the Board acknowledged “the loss of huge amount of money…as uncollectible amount with the total amount of P10,324,946.03” from the P14-M placed by Valenzuela in Prime Bank.

The resolution was signed by Mercado and 4 other board members who are also priests.

The entire clergy and lay leaders found out the anomaly when a copy of the resolution was leaked.

“For mishandling millions of school funds, Fr.  Valenzuela got a slap on the wrist,” one disgruntled priest observed.

To add to the cover-up, Valenzuela was also given permission by Mercado to resume his priestly duties in New York.

War among Men of Peace

The simmering revolt among the clergy came to a head last April 20, 2012 at the annual clergy formation held by the diocese in Tagaytay.

The last day of the week-long formation was allotted for discussing pending issues raised during previous vicariate meeting.

Previous to this, letters were sent to the Papal Nuncio asking Mercado to be replaced for financial mismanagement, failed leadership and sowing discord among priests resulting in a “demoralized, divided and disillusioned clergy,” one letter said.

A copy of the incident report on the formation’s last day showed disgruntled priests and those loyal to Mercado warring among themselves.

It was a messy affair, where priests took turns in telling on each other.

Two priests identified with Mercado, Fr. John Paul del Rosario and Fr. Lambert Legaspino, castigated their peers for sending letters to the Nuncio that portrayed Mercado in a bad light.

Mercado, who was present, left the room and did not come back.

Three priests – Fr. Benjamin Molina, Monsignor Mel David, and Fr. Christian Gabinete – admitted to the plenary that they sent letters to the Nuncio reporting the state of disorder in the diocese.

Tejido said he told the Nuncio that he had considered leaving the priesthood because of his negative experiences with Mercado. Molina admitted he reported the lack of financial transparency and the lack of funding for diocesan ministries, as well as his arbitrary removal from his parish without due process.

David, for his part, also said he told the Nuncio about the misuse of diocesan funds and the lack of due process in his case. Gabinete said he complained to the Nuncio about the bishop’s witch-hunt.

Priests allied with Mercado countered that the complaining priests had issues on morality and celibacy themselves, and that they had no moral high ground to speak of.

This led to two priests on both sides accusing each other of having separate affairs.

In one of the letters submitted to the Nuncio, some “concerned clergy” warned that the Church “will further be divided and damaged and our credibility brought into question” if Mercado remains as their bishop. They insisted that “the bishop is not capable of running the diocese.”

The Nuncio initially resisted acting on the complaints but eventually relented. The Nuncio serves as the eyes and ears of the Pope. He can exercise "persuasive powers" to settle disputes and work out issues in dioceses, if he so wishes.

But like Pontius Pilate, the Nuncio opted to wash his hands and refer Mercado’s case to Rome. – Rappler.com


This story is part of a groundbreaking book on the Philippine Catholic Church that Aries Rufo is completing.

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